Stock Market Basics
What does it mean to "go long" on a stock?
Buying a stock expecting it to increase in value.
What does P/E stand for and what does it measure?
Price-to-Earnings ratio; it measures how much investors are paying per dollar of earnings.
Who is known for value investing and runs Berkshire Hathaway?
Warren Buffett
What is the current Fed Funds Rate? (accept ballpark)
~5.25–5.50% (as of early 2025)
What animal is used to represent a rising market?
A bull.
What is a dividend?
What is a dividend?
A company’s payment of a portion of its profits to shareholders
What is the formula for calculating return on equity (ROE)?
Net Income ÷ Shareholders' Equity.
Which investor is famous for his work at Fidelity and for the book One Up on Wall Street?
Peter Lynch
Name one major tech stock that hit an all-time high this year.
Acceptable answers: NVIDIA, Microsoft, Apple
What is the origin of the term "blue chip stock"?
From poker, where blue chips hold the highest value.
What is the difference between the NYSE and NASDAQ?
NYSE has a physical trading floor; NASDAQ is electronic and often tech-focused.
What does a high debt-to-equity ratio indicate?
A company may be relying heavily on borrowed money, increasing financial risk.
Who is a well-known TV personality and investor on Shark Tank?
Mark Cuban
What does the term “soft landing” refer to in today’s economic discussions?
Slowing inflation without triggering a recession.
What does the acronym "FOMO" stand for in investing?
Fear of Missing Out.
What is a stock split and why might a company do one?
It increases the number of shares and lowers the price per share to improve accessibility.
What is EBITDA and why do analysts use it?
Earnings Before Interest, Taxes, Depreciation & Amortization; it helps assess operating performance.
Which legendary investor founded Vanguard and popularized index fund investing?
John Bogle
Which sector performed best in the last quarter? (Energy, Tech, Healthcare, etc.)
In the fourth quarter of 2024, the Communication Services sector led the S&P 500 with an estimated earnings growth of 32.2%
Which stock has the ticker symbol "DIS"?
Disney.
What is the S&P 500 and why is it important?
A market index of 500 large U.S. companies used as a performance benchmark.
If a company has a current ratio under 1, what might that signal?
It may have trouble meeting short-term liabilities with current assets.
This investor founded Bridgewater Associates and is known for the book Principles.
Ray Dalio
What is one major geopolitical event currently affecting markets?
Acceptable answers: Ukraine war, Middle East conflict, China-Taiwan tensions, etc.
What fast-food company once accepted Bitcoin for a test run?
Burger King (also acceptable: others like Subway, but BK is well-known).